Android: "Excessive Choice" Danger?

Android developments continue fast and furious. AT&T says it will launch five separate Android devices by June. Only days after announcing its Nexus One, Google says it will introduce a "Nexus Two" better optimized for business users.

The Verizon Droid, launched in November, seems to have abruptly changed Android's position in the mobile browsing market in under two months, and dramatically increased the general level of interest in Android devices overall.

In just two months, Android has emerged as the second most popular platform used to access InformationWeek’s mobile web site, pushing aside BlackBerry and taking a meaningful bite out of Apple’s iPhone share of traffic, says Tom Smith, TechWeb VP.

In November 2009, Android accounted for eight percent of mobile page views at TechWeb, compared to 59 percent for Apple and 17 percent for Blackberry, says Smith.

In December, though, Android did far better. Apple had 51 percent share; Android 24 percent; Blackberry eight percent, he says.

Google, which just released the the Nexus One phone, now says the Nexus Two will have a physical keyboard and will be more suitable for enterprise users (obligatory boilerplate: "Nexus One" is aimed at the Apple iPhone; Nexus Two will challenge the BlackBerry").

Android enthusiasts will be pleased by the explosion of activity, right? Well, yes and no. The whirlwind of activity could have an opposite effect: either freezing potential buyers into inaction as they wait for the next device, the next offer, the next set of business arrangements and carriers.

Social psychologists Sheena Iyengar, PhD, a management professor at Columbia University Business School, and Mark Lepper, PhD, a psychology professor at Stanford University, have demonstrated the downside of "excessive" choice.

In a 2000 paper the researchers showed that when shoppers are given the option of choosing among smaller and larger assortments of jam, they show more interest in the larger assortment.

But when it comes time to pick just one, they're 10 times more likely to make a purchase if they choose among six rather than among 24 flavors of jam.

In a separate study, Iyengar and Wei Jiang, PhD, a finance professor at Columbia Business School, analyzed retirement-fund choices, ranging from packages of two to 59 choices, among some 800,000 employees at 647 companies.

Instead of leading to more thoughtful choosing, however, more options led people to act like the jam buyers: When given two choices, 75 percent participated, but when given 59 choices, only 60 percent did. In addition, the greater the number of options, the more cautious people were with their investment strategies, the team found.

Relatedly, too much choice also can lead people to make simple, snap judgments just to avoid the hassle of wading through confusing options, which ironically can sabotage a company's marketing plan, finds social psychologist Alexander Chernev, PhD, of Northwestern University's Kellogg School of Management.

Chernev found that when people were offered variants of the same brand of toothpaste, cavity-prevention, tartar-control and teeth-whitening types, for instance, they tended to switch to another brand that offered a single option.

So what's the problem? "The customer has no idea how to decide and may therefore switch to another brand that doesn't require making tradeoffs," Chernev says.

In that case, they often choose what Herbert Simon, PhD, first referred to as a "satisficing" option: people make the first reasonable choice that fits their preferences, but not the "absolute best" solution.

In other words, instead of exhaustively scanning all options until finding the perfect, or "maximizing" choice, people simply make the "it's okay" choice, not working through all the possible angles.

The implication for Android buyers?  Study the options, then settle on something you feel good, if not perfectly, about. Trying to buy the "absolute best" device will create anxiety and buyer's remorse at some point as the next device option is made available, the price of older options plummets or terms of service and carrier choices evolve.

Android Bumps BlackBerry Traffic in December, TechWeb Says

In just two months, Android has emerged as the second most popular platform used to access InformationWeek’s mobile web site, pushing aside BlackBerry and taking a meaningful bite out of Apple’s iPhone share of traffic, says Tom Smith, TechWeb VP.

In November 2009, Android accounted for eight percent of mobile page views at TechWeb, compared to 59 percent for Apple and 17 percent for Blackberry, says Smith.

In December, though, Android did far better. Apple had 51 percent share; Android 24 percent; Blackberry eight percent, he says.

"To varying degrees, the trends are holding up across other sites in our network as well, but those sites don’t have the same level of visitor activity as mobile.informationweek.com so the numbers above are the strongest indicator we have of Droid’s impact," says Smith.

Smith thinks it was the Verizon launch of the Droid that caused the surge in mobile activity. "We saw a spike in usage of our mobile sites in December, when Droid activity truly took off," he says.

Android appears to be making what had been a two-horse race in smartphones into a three-horse contest, with the previous number two, Research in Motion, being pushed back to third place.

Though impressionistic, the data is in line with what other recent studies suggest, namely that the Android operating system hit some sort of inflection point in December 2009.

Mobile Browsing Still Just 1.3% of All Browsing, But Growing Fast

Mobile browsing now accounts for 1.3 percent of all Internet browsing, according to Net Applications. That measurement was taken in December 2009, which saw double-digit increases for virtually all mobile operating systems, with an unusually high increase for Android.

The Net Applications statistics confirm that most users continue to do most of their Web browsing on PCs, but also that mobile's share has steadily increased during 2009.

Both Windows and Mac devices lost a small amount of share in December, as Android began to make its presence felt, but all major mobile operating systems posted large percentage gains. Android grew  54.8 percent, while BlackBerry grew 22.2 percent. The Apple iPhone posted a 19-percent gain while Java ME grew 15.4 percent.

While the iPhone continues to account for the largest share of mobile Web browsing, Google's Android mobile operating system was by far the largest percentage gainer in December 2009,  accounting for 0.05 percent of all Web browsing, up from 0.01 percent in February.

It does appear an inflection point has been reached, however: the adoption curve appears to be steepening.

Sprint and Skiff to Sell E-Reader

Though firm pricing and availability are not yet announced, Sprint will be providing the connectivity services for the new Skiff e-reader, to be sold sometime this year.

The Skiff Reader e-reader uses a metal foil display service, not glass.

Sprint and Skiff will also launch a Skiff Store, where users will be able to find more digital content.

Touted as the “first e-reader optimized for newspaper and magazine content”, as well as the first to use LG Display’s “metal foil” e-paper technology, the Skiff Reader will use Sprint’s 3G network and also can use a Wi-Fi connection.

The Skiff Reader also features Wi-Fi, a 11.5 inch, 1200 x 1600 pixels touchscreen display, built-in speaker, 3.5mm headset jack, and USB 2.0.

Books, magazines, newspapers, personal and work documents, and other types of digital content can be stored on the Skiff Reader thanks to its 4GB internal memory (expandable with a MicroSD card).

The Skiff Reader, the initial dedicated device to integrate the upcoming Skiff e-reading service, is about  a quarter-inch in overall height and clearly is the thinnest e-reader yet produced by any supplier.

The device uses a full touch-screen and weighs just over one pound.

The Skiff Reader's flexibility is based on its construction from a thin, flexible sheet of stainless-steel foil, not glass.

More Regulation Needed to Spur Broadband Competition? Really?

The U.S. Federal Communications Commission should consider regulations for broadband providers in an effort to increase competition, says Lawrence Strickling, National Telecommunications and Information Administrationassistant secretary, as reported by IDG News Service.

"We urge the Commission to examine what in many areas of the country is at best a duopoly market and to consider what, if any, level of regulation may be appropriate to govern the behavior of duopolists," Strickling says.

With all due respect for Strickling, who is a smart, experienced regulatory type who knows the terrain, and without disagreeing in full with the full content of his filing on behalf of NTIA, the notion that competition somehow is so stunted that new regulatiions are required likely would lead to greater harm, despite its good intentions.

Here's the argument. Consider, if you will, any large industry with critical implications for the entire U.S. economy. Now consider the following mandate: "you will be forced to replace 50 percent of your entire revenue in 10 years."

"During that time, for a variety of reasons, incumbents will be forced to surrender significant market share to competitors, so that in addition to replacing half of the industry's revenue, it also will have to do so with dramatically fewer customers."

"After that, in another decade, the industry will be required to replace, again, another 50 percent of its revenue. All together, the industry will required to relinquish at least 30 percent of its market share, in some cases as much as half, and also will be required to replace nearly 100 percent of its revenue, including the main drivers of its profitability."

Does that sound like the sort of industry that desperately needs additional competition? Really?

Nor is the argument theoretical. Over a 10-year period between 1997 and 2007, the U.S. telephone industry was so beset with new technology and competition that almost precisly half of its revenue (long distance), the revenue driver that provided nearly all its actual profit, was lost.

The good news is that the revenue was replaced by wireless voice. Then, because of the Internet, cable company entry into voice and the Telecommunications Act of 1996, market share began to wither. That, after all, is the point of deregulation: incumbents are supposed to lose market share to competitors.

Now we have the second decade's project, when mobile voice revenues similarly will have to be replaced, in turn, as IP-based voice undermines the high-margin voice services that have been the mainstay of the mobile business.

If you follow the telecom industry as a financial matter, you know that service providers have maintained their profitability only partly by growing topline revenues. They also have been downsizing workforces and slashing operating costs.

If you talk to ex-employees of the telecom industry, they will tell you the industry seems no longer to be a "growth" industry. That's why millions of people who used to work in telecom no longer do so.

So what about the other big incumbent industry, cable TV operators. As you clearly can see, and can read about nearly every day, there are huge questions about the future business model for what used to be known as "cable TV." Many observers already predict that such services will move to Internet delivery, weakening or destroying the profitability of the U.S. cable industry.

Industry executives, no dummies they, already have moved into consumer voice and data communications, and now are ramping up their assault on business communications. Why? They are going in reverse for the core video business.

Imposing regulatory burdens on incumbents--either telco or cable--that are losing their core revenue drivers on such a scale might not be wise. Few industries would survive back-to-back decades where the core revenue drivers must be replaced by "something else."

Imagine the U.S. Treasury being asked to replace virtually 100 percent of its revenue with "something else" in about 20 years. Imagine virtually any other industry being asked to do the same.

The point is that industries asked to confront such challenges and surmount them are not typically the sort of industries that need to have additional serious obstacles placed in their way.

Granted, they are niche suppliers, but Strickling also is well aware there are two satellite broadband providers battling for customers, plus five mobile broadband providers, and then hundreds of independent providers providing terrestrial fixed wireless access or packaging wholesale capacity to provide retail services.

Granted, only cable, satellite, telcos and several mobile providers have anything like ubiquitous footprints, but that is a function of the capital intensity of the business. Most markets will not support more than several suppliers in either fixed or wireless segments of the business.

One can argue there is not more facilities-based competition because regulation is inadequate, or one can argue investment capital no longer can be raised to build a third ubiquitous wired network.

The point is that wired network scarcity might be a functional of rational assessments of likely payback. Cable TV franchises are not a monopoly in any U.S. community. But only rarely have third providers other than the cable TV or incumbent phone companies attempted to build city-wide third networks. Regulatory barriers are not the issue: capital and business potential are the problems.

Also I would grant that mobile broadband is not a full product substitute for fixed broadband. But where we might be in five to 10 years cannot yet be ascertained. And we certainly do not want to make the same mistake we made last time.

The Telecommunications Act of 1996, the first major revamping of U.S. telecom regulation since 1934, was supposed to shake up the sleepy phone business. But the Telecom Act of 1996 occurred just as landline voice was fading, and the Internet was rising.

If you wonder why virtually every human being with a long enough memory would say their access to applications, services, features and reasonable prices is much better now than before the Telecom Act of 1996, even assuming it has completely failed, the answer is that the technology and the market moved too fast for regulators to keep up.

The Telecom Act tried to remedy a problem that fast is becoming irrelevant: namely competition for voice services. In fact, voice services rapidly are becoming largely irrelevant, or marginal, as the key revenue drivers for most providers in the business.

Yes, there are only a few ubiquitous wired or wireless networks able to provider broadband. But that might be a function of the capital required to build such networks, the nature of payback in a fiercely-competitive market and a shift of potential revenue away from "network access" suppliers and towards application providers.

It always sounds good to call for more competition. Sometimes it even is the right thing to do. But there are other times when markets actually cannot support much more competition than already exists. Two to three fixed broadband networks in a market, plus two satellite broadband providers, plus four to five mobile providers, plus many smaller fixed wireless or reseller providers does not sound much like a "market" that needs to stimulate more competition.

There's another line of reasoning one might take, but would make for a very-long post. That argument would be that, judged simply on its own merits, the availability and quality of broadband services, in a continent-sized country such as the United States, with its varigated population density, is about what one would expect.

Even proponents of better broadband service in the United States are beginning to recognize that "availability" is not the problem: "demand" for the product is the key issue.

Google Nexus One: Buy the Rumor, Sell the News

"Buy the rumor, sell the news," traders sometimes say. That seems to apply to Google's announcement of the HTC-built "Nexus One" smartphone.

There was so much leaking of news about the device, its distribution model and retail pricing that some of us likely were underwhelmed by the actual launch.

That is no slam on the device, just a comment about expectations.

As sometimes happens with financial assets, sometimes the big run-up occurs only at the "rumor" stage, with the actual confirmed event then provoking a bit of a sell-off. Some of us might note that it has taken a year for Android devices as a whole to reach what appears to be an inflection point in terms of mass buyer interest.

One probably has to credit Verizon Wireless for almost single-handedly creating "buzz" around its Droid, with spillover effects on the rest of the Android market, in all likelihood. But as many have noted, though the Nexus One appears to be a fine device, the business "wrap around" is largely conventional.

In fact, in some ways, Google is being "carrier friendly" in a way Apple has not been. That likely comes as quite a shock to many who thought Google was angling for a bit more disruption. The phone can be bought at full retail and unlocked. That's fine, but few Americans buy their devices that way.

An unlocked device can in principle be used on any GSM network in the United States, but the frequency range specified for the Nexus One means that, if used on the AT&T network, 3G won't work. In practice, that means the Nexus One is a "T-Mobile USA only" device.

If bought with a two-year contract from T-Mobile, the device costs $179. Some people will note that the Nexus One is "first" device that actually can go "head to head" with the iPhone. Others might almost say, "so what?" If all any other competing device can do is replicate the iPhone, many users might simply buy the iPhone.

Progress in the Android handset space continues to be quite rapid, so we'll have to wait and see what happens next. But it would not be surprising if it takes a little time for the Nexus One to have an impact. If the massive Verizon advertising campaign for the Droid means anything, it means promotion and marketing can make all the difference, even for a highly-capable device such as the Nexus One.

As the launch hype fades, we likely will settle in for a year or more of what appears only to be incremental growth for the Nexus One. So far, some of us cannot yet see why the Nexus One is such an advance over the Droid, as some expected. Then again, that's what this next year or so is about: allowing consumers to become familiar with the device and figure out where it fits in the smartphone market.

One might simply argue that the Nexus One is not the iPhone, and neither is the Verizon Droid, meant in a market positioning sense. The Apple iPhone seems to have created a large and sustainable niche of its own. Other devices might emulate the iPhone, but cannot create their own sustainable niches unless they somehow create differentiated audiences, as we might say in the media business.

In other words, Nexus One has to create a fan base that uses and perceives the device to be different from an iPhone, not the same. So will the Droid and all other devices in the high-end smartphone segment of the market. There's only one "iPhone." All other high-end devices must essentially create their own sustainable niches.

Matters are different at the lower end of the device market, where price and functionality make more devices functional substitutes for each other. I don't think that is the case at the high end. We'll see.

66% of U.S. Mobile Devices Will Be Replaced Over the Next 2 Years

About 66 percent of U.S. mobile devices will be replaced within the next two years, says ICR/International Communications Research, a prediction that should not surprise anybody. Mobiles break, get lost and typically have two-year contracts.

As might be expected, the younger generation is more likely to make a change sooner: 77 percent of those 18 to 34 plan to replace their mobile devices within the next two years, compared to  46 percent of those 65 or older.

About 78 percent of respondents believe they will need to replace their devices within the next two years because the items will break or be lost, while only 19 percent think they will want to upgrade to the latest version.

Upgraders also vary by age with 26 percent of 18 to 34 year-olds saying they do so, compared to 14 percent of respondents 55 or older.

Over the Next 6 Months, 3 Million More U.S. Households Will go "Wireless Only"

At current rates, over the next six months about three million more U.S. homes will go "wireless only" for phone service, a new study by the Centers for Disease Control suggests.

About 22.7 percent of U.S. homes apparently had wireless-only phone service in June 2009, according to a preliminary analysis of the most-recent survey by the Centers for Disease Control, up from about 20 percent in December of 2008.

In addition, nearly 15 percent of surveyed homes had a landline yet received all or almost all calls on wireless telephones.

A "family" can be an individual or a group of two or more related persons living together in the same housing unit (a "household"). Thus, a family can consist of only one person, and more than one family can live in a household (including, for example, a household where there are multiple single-person families, as when unrelated roommates are living together).

Approximately 21 percent of all adults--approximately 48 million people--live in households with only wireless telephones.

The percentage of households that are wireless-only has been steadily increasing, and the 2.5-percentage-point increase from 2008 through the first six months of 2009 is about equal to the 2.7-percentage-point increase observed from the first six months of 2008 through the last six months of 2008.

The percentage of households that are wireless-only increased by about five percentage points in just 12 months, from 17.5 percent in the first six months of 2008 to 22.7 percent in the first six months of 2009.

There are about 113 million U.S. homes with fixed telephone lines, and about 118 million U.S. dwellings, according to the Federal Communications Commission. A five-percent increase in homes using wireless only would amount to about six million homes.

Should that rate of shift continue, one would expect a further attrition of about three million homes to the wireless-only category over the next six months.

A large majority of households using wireless-only communications (68.5 percent) were in households lived in by unrelated adult roommates. Think college students and younger workers early in their careers and you get the picture.

Likewise, 41 percent of adults renting their homes had only wireless telephones. About 13 percent of adults owning their home are wireless only, the CDC says.

Nearly half of adults aged 25 years to 29 years (45.8 percent) lived in households with only wireless telephones, the study suggests.

More than a third of adults aged 18 to 24 (37.6 percent) and approximately a third of adults aged 30 to 34 (33.5 percent) lived in wireless-only households.

Some 21.5 percent of adults aged 35 to 44 were wireless only; 12.8 percent of adults 45 to 64; and 5.4 percent of those 65 and over. However, the percentage of wireless-only adults within each age group has increased over time, the CDC says.

Among all wireless-only adults, the proportion of adults aged 30 years and over has steadily increased. In the first 6 months of 2009, the majority of wireless-only adults (57.2 percent) were aged 30 and over, up from 48.4 percent three years earlier.

Adults working at a job or business (19.5 percent) and adults going to school (21.1 percent) were more likely to be living in wireless-mostly households than were adults keeping house (12.7 percent) or with another employment status such as retired or unemployed (nine percent).

Adults with college degrees (19.7 percent) were more likely to be living in wireless-mostly households than were high school graduates (13.7 percent) or adults with less education (12.1 percent).

You might suspect that households with children are less likely to be wireless only, but that seems not to be the case. In the CDC survey, adults living with children (20.5 percent) were more likely than adults living alone (10 percent) or with only adult relatives (14.7 percent) to be living in wireless-mostly households.

You might suspect that more users are wireless only in urban area, and that seems to be the case. Adults living in metropolitan areas (16.9 percent) were more likely to be living in wireless-mostly households than were adults living in more rural areas (13.5 percent).

Apple iPhone and Android Top OS Satisfaction Ratings

When it comes to satisfaction levels, the Apple iPhone continues to lead all other major cell phone manufacturers, with 74 percent of owners reporting they're "very satisfied" with their iPhone, according to ChangeWave Research.

But 72 percent of Android users also say they are "very satisfied." There's a big gap to the number-three OS, where 41 percent of Research in Motion users say they are very satisfied with the operating system.

It is worth noting that the "very satisfied" rankings for the Palm OS primarily reflect experience with the older OS, not the new  Web OS (Pre, for example). About 58 percent of Pre users say they are very satisfied, while for smart phones using the older Palm OS it was just 29 percent.

Is Android Finally at an Inflection Point?

The Android seems to have hit a sales inflection point, and is poised to take share in the smartphone market, according to ChangeWave Research.

More buyers now are indicating they will be buying Android devices, and fewer say they will be buying an iPhone. In September 2009 about six percent of respondents to 21 percent of respondents to a recent ChangeWave Research survey.

At the same time, where 32 percent of respondents said they would be buying an iPhone in September, 28 percent said they would be doing so in the December 2009 survey.

The ChangeWave Research data suggests that Android has hit an inflection point, after roughly a year on the market, a time when some observers might have wondered whether Android would emerge as a viable alternative to the iPhone.

The ChangeWave survey also suggests that the Android is taking share from other devices as well, with the possible exception of the BlackBerry. Where 17 percent of respondents said they would be buying a BlackBerry in September, about 18 percent said they would be doing so in December.

But Windows Mobile buying intentions were about nine percent in September and had dropped to six percent by December. Likewise, about six percent of respondents suggested they would be buying a Palm OS device in September; just three percent in December.

Android Becoming a Factor in U.S. Mobile Ad Market

Android smartphones are becoming a bigger factor in the U.S. mobile advertising market, with ad requests growing 97 percent in just two months between October 2009 and December 2009, according to AdMob.

Of those one billion ad requests tracked by AdMob, 90 percent were from U.S.-based devices.AdMob tracks handset and operator data from every ad request in its advertising network of more than 15,000 mobile web sites and applications.

Much of the growth was driven by the release of the Motorola Droid. Before the Droid’s launch, HTC devices accounted for 98 percent of Android requests. In December, that fell to 56 percent, with 39 percent from Motorola (which also offers the CLIQ) and five percent from Samsung.

The Motorola Droid already is the leading Android handset in the AdMob network and generated 30 percent of requests in December.

Google Nexus One Unveiling Jan. 5, 2010?

Google seems to be gearing up for a Jan. 5, 2010 unveiling of its Nexus One smartphone. The somewhat controversial move might be seen as a misguided effort that will undercut Google's effort to support broad adoption of its Android operating system by all the major service providers.

Worse still, in the worst-case scenario, Google is aiming to become a service provider in its own right. That seems highly unlikely. That really would strain relationships with its carrier partners. Nor does Google seem to be angling to become a hardware supplier in the same way that Apple is.

True, it seems to be fostering development of handsets. But even a Google-branded device might be seen as a way of pointing out what it thinks could be done.

One suspects that the unveiling is more of a demonstration project, intended to showcase what might be done with the Android operating system when paired with mobile hardware. One reason for that belief is that unlocked smartphone devices are expensive enough that few actually are sold in the U.S. market.

More seriously, T-Mobile is rumored to be readying a contract-subsidized Nexus One deal, which would put the out-of-pocket cost of the device within typical ranges for some other leading smartphone models. The typical model is a two-year contract in exchange for a device subsidy, and that is what most observers expect to see.

That is a fairly well established business model, giving T-Mobile a period of device exclusivity before it also is made available to other service providers.

The other angle is that if Google were really serious about becoming a player in either the device or service provider business, it likely would have readied deals in multiple countries.

The key thing is whether the user experience winds up being something users clearly can perceive as offering a "delightful" experience. That would seem to be the point. Whether Google can deliver remains to be seen.

E-Book Style Revenue Models Needed for Many Mobile Devices

As Apple plans to introduce a new mobile "tablet" device, and rumors grow that Google is working on a Chrome operating system tablet of its own, it is not hard to predict that much future growth for mobile service providers will be in providing broadband data connections for such devices, whether or not the actual first-generation devices from Apple and Google actually take off.

The reasons are drop-dead simple: most people who want a mobile phone already have one. The new growth frontier is for other devices that also benefit from a broadband connection, such as notebooks, tablets and e-book readers.

Shipments of mobile broadband-enabled consumer electronics are forecast to increase 55-fold between 2008 and 2014, say researchers at ABI Research. The market includes e-book readers, mobile digital cameras and camcorders, personal media players, personal navigation devices and mobile gaming devices. Total global shipments reach 58 million in 2014, says ABI Research.

One suspects sales of mobile-connected devices will hit critical mass only when a device is linked intimately with a content service that provides the revenue model. Not many consumers likely will spend much money to Internet-enable their cameras, for example.

Instead, what we probably will need to see are content services (e-book readers provide an excellent example) where payment for content subsidizes the use of mobile broadband access, with no incremental cost to the end user.

One suspects tablet devices likewise will achieve only modest success until video and other content services provide the revenue to support no-incremental-cost use of mobile broadband connectivity.

It isn't immediately clear how this might work for devices supporting multi-player gaming, for example, but e-book style models likely will have to be created for mass adoption of mobile broadband for gaming devices.

Consumers are not going to want to buy subscription plans for many discrete mobile devices at rates anywhere close to what broadband access now costs, either for smartphones or notebooks, for example.

Is Digital Delivery Destroying Other Parts of the Movie Ecosystem?

Reality typically is more complex than any forecast about reality. Consider the movie business and downstream ecosystem. Digital entertainment was supposed to destroy the movie theater business, but evidence is contradictory on that score.

It might be more accurate to say that the digital entertainment business is hitting "physical media" sales more than anything else. In the first half of 2009, ticket sales grew 17.5 percent, according to Media by Numbers, a box-office tracking company. You might argue that is the result of higher ticket prices or a desire to momentarily escape recession woes.

As it turns out, neither of those factors seem to be driving the trend. Attendance jumped by nearly 16 percent in the first half of 2009. If those rates hold for the whole year, it would be the biggest box-office surge in at least two decades.

There likely is some truth to the adage that "people go to movies more frequently in a recession." But the evidence is mixed on that score. The last time Hollywood enjoyed a double-digit jump in attendance was 1989, when the unemployment rate was at a comfortable 5.4 percent. That year, the number of moviegoers shot up 16.4 percent, according to Box Office Mojo.

In 1982, theater attendance jumped 10.1 percent to about 1.18 billion as unemployment rose sharply past 10 percent. Then admissions fell nearly 12 percent, an unusually sharp drop, in 1985, as the economy picked up.

The economy's effect is a bit unclear, in other words. As always is the case, though, movie attendance is higher when film-makers create movies lots of people want to see, and that likely is a part of the story.

The film industry over the last year or two has released movies that are happier, scarier or just less depressing than what came before, some might argue.

Still, the point is that digital delivery has not adversely affected theater attendance of late.

DVD sales are another matter. In 2008, movie ticket sales surpassed DVD revenue, according to Adams Media Research. Where 2009 box office receipts grew 10 percent $9.87 billion, DVD sales fell 13 percent to $8.73 billion.

For whatever reason, consumers are spending less money buying DVDs than they had been for most of the past 10 years, and a reasonable guess would be that video on demand and other streaming services finally are starting to have an impact. The other angle is that Netflix has kept growing as well, despite predictions by many that growth would falter as Internet delivery and VOD became more established behaviors.

Consumers may also have realized that they will not watch most movies more than once. That will shift behavior towards rental services and VOD.

The prevailing wisdom is that the DVD business is in a permanent decline. A few years ago many analysts wrongly predicted that theater sales would drop every year, as well. One should never underestimate the impact business decisions by the movie ecosystem can have.

Making movies people want to see plays a huge role, for example. Pricing and distribution decisions made in the DVD sales and rental channel also can have a huge and unforseen impact. Netflix disrupted the retail rental store business, for example.

Also, Blu-ray HDTV appliance adoption might be playing a role as well. Though the installed base of DVD players still represent the lion's share of device usage, Blu-ray obviously is growing. That could have consumers holding back on purchases of physical media they believe will someday go the way of casette tapes.

North America is Ripe for New Broadband Backhaul Facilities

North America appears to be ripe for new high-capacity backhaul from mobile tower sites to points of presence.

The reason? Mobile broadband is not matched by backhaul broadband. Most tower links use T1 connections running at 1.544 Mbps.

That clearly is not good enough for mass adoption of mobile broadband services. Internet service providers located in rural areas have additional problems, though. Quite often, regional connections between local points of presence and the nearest Internet PoPs also use T1 connections.

If you wonder why "middle mile" projects were so prominent in the first wave of broadband stimulus awards, that's why.